Warsh’s Hawkish Fed Debut Lifts Rate Hike Odds | Presented by CME Group
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Summary
The segment reports the Fed held rates steady at 3.5-3.75% in a unanimous vote, removed dovish language from its statement, and new Chair Kevin Warsh struck a hawkish tone. Money markets, measured by the CME FedWatch tool, increased implied probabilities of a rate hike as soon as September and assigned a very high likelihood to a December hike.
- Fed holds rates at 3.5-3.75%, fourth straight unchanged meeting.
- FOMC removes language that previously pointed to potential easing.
- New Fed Chair Kevin Warsh makes a hawkish debut, vowing to fix inflation.
- CME FedWatch tool reprices to show elevated odds of a September hike.
- Probability of at least one rate hike by December rises above 75%.
- Market repricing driven by stronger jobs data and sticky core inflation above 2% target.
